Background information

Definitively adopted by the Parliament on 3 August 2022, the law "on emergency measures to protect purchasing power" Law number 2022-1158 of 16 August 2022 is part of the "purchasing power package" planned by the government to fight inflation. It provides for several measures, including the perpetuation and adaptation of the "Exceptional Purchasing Power Bonus" (known as Pepa or "Macron bonus") which was created during the "Yellow jackets" crisis and then maintained during the COVID-19 crisis to encourage companies to reward essential workers.

Content of measure

The bonus has been renamed into "value-sharing bonus". Its amount has been tripled compared to the "Macron bonus". The bonus applies to companies of all sizes. It allows employers to pay an annual bonus (retroactively from 1 July 2022) of up to €6,000 without paying social security contributions on this sum. Employees are also exempt from social security contributions and, under certain conditions, benefit from an exemption from income tax.

Implementation

The value-sharing bonus must be introduced by a company or group agreement, or by a unilateral decision of the employer. In the latter case, the employer must first consult the works council (social and economic committee - CSE).

Amount of the bonus

To be fully exempt from social security contributions, the amount of the value-sharing bonus must not exceed €3,000 per calendar year and per beneficiary (instead €1,000 for the previous "Macron" bonus). This limit is increased to €6,000 when the company has concluded a collective agreement with the employees or their representatives on a financial participation scheme linked to the company's results (either a profit-sharing agreement -intéressement – or, in companies with less than 50 employees, a participation agreement).

The amount of the bonus may differ according to the employee's pay, classification level, length of service in the company, actual length of time worked during the previous year or the length of time worked under the contract.

It cannot be paid on a monthly basis in order to avoid substitution for salary. However, it may be paid in instalments up to a maximum of once per quarter during the calendar year.

Social and fiscal regime

The value-sharing bonus is exempt from all social security contributions of legal or conventional origin payable by the employee and the employer, within the limits of the €3,000 or €6,000 ceilings as indicated above, regardless of the employee's level of remuneration. In terms of taxation, only bonuses paid between 1 July 2022 and 31 December 2023 to employees who received remuneration of less than three times the annual value of the minimum wage (Smic) – which represents on 1 September 2022, €60,442.20 – during the 12 months preceding their payment will be exempt from income tax and the two contributions levied on salaries, the CSG and the CRDS.

Use of measure

As this is a new measure, there is no data available.

However, figures exist for the previous "Macron bonus". In the first year, during the first quarter of 2019, according to data from Acoss, about one in five private sector establishments used the scheme: more than 400,000 establishments paid out nearly €2.2 billion to 4.8 million employees, or an average of €401 per employee beneficiary (less than half the bonus ceiling).

In a recent article, the daily newspaper Les Echos emphasises that the results are mixed. In 2021, according to government figures, 4 million French people received the bonus (out of 25 million employees in France) for an average amount of €506. Far from the possible €1,000. There were 6 million beneficiaries in 2020 and 5 million in 2019, the first year of its application.

In August and September 2022, 730,000 employees received the new value-sharing bonus, according to the Ministry of Economy. The average amount paid by companies was more than €710, while the exemption ceiling was tripled to €3,000, or even €6,000 under certain conditions.

Target groups

Workers	Businesses	Citizens
Employees in standard employment Workers in non-standard forms of employment	Does not apply to businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Trade unions Company / Companies	Employer National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Company level

Involvement

No specific involvement as the bonus is a governmental decision. However, social partners may negotiate at the company level the implementation of the bonus which can be different for the employees taking into account various criteria such as seniority or qualification. Therefore the conditions and the amounts can be fixed by a company-level collective agreement.

Views and reactions

Trade unions have a mixed position as for each bonus that is exempted of social contributions as these measures weaken the financial balance of the social security system. Employers are not against, but have also some criticisms as CMPE which would prefer to individualise the bonus instead of paying it, with the same amount, to an entire category of employees.

On the employers' side, the measures presented by the government are better accepted. The criticisms are more on the modalities. The CPME expressed its concern that the monthly payment of the bonus was not included in the bill.

The Mouvement des Entreprises de France (MEDEF) welcomed the announcement of the renewal of the exceptional bonus for purchasing power. 'Thanks to its simplicity and exemption from charges, this scheme facilitated the payment of bonuses to support employees in a period of rising living costs, while preserving employment in France', explains MEDEF. But the MEDEF has denounced that the law is weakening the objective by subjecting the value-sharing bonus, to a 20% social security charge for medium and large companies.' A company that could offer a €500 bonus yesterday will only be able to pay €416 tomorrow, as this will cost it an additional €83 in social security contributions', regrets Medef.

Sources

• 02 July 2020: Prime exceptionnelle de pouvoir d’achat en 2019 : entre hausse des salaires et aubaine pour les entreprises (www.insee.fr)
• 24 May 2022: La prime Macron, l'alternative au salaire peu utilisée par les employeurs (www.lesechos.fr)
• 11 July 2022: MEDEF: Prime de partage de la valeur (www.medef.com)
• 16 August 2022: Loi n° 2022-1158 du 16 août 2022 portant mesures d'urgence pour la protection du pouvoir d'achat (www.legifrance.gouv.fr)